In advance of the EU Commission’s Carbon Border Adjustment Mechanism proposal in July, this Briefing Paper offers a conceptual rubric for evaluating CBA design as a policy trilemma between environmental ambition, technical feasibility and fairness. The paper discusses each aspect of the trilemma and outlines potential tradeoffs that may be necessary between reducing emissions, navigating the complexities of calculating charges, and ensuring mechanisms are WTO-compliant and fair to developing countries. The Briefing Paper also argues that CBA also gives rise to the need for new forms of trade and climate cooperation to determine which other countries or producers have equivalent pricing, and therefore should be exempted. The upcoming G7 and COP, both hosted by the UK, provide an opportunity to make progress on these important questions.

Read Briefing Paper 56: THE CARBON BORDER ADJUSTMENT TRILEMMA